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More Woes For Spain  
User currently offlinebaexecutive From United Kingdom, joined Jul 2005, 701 posts, RR: 0
Posted (3 years 10 months 4 weeks 13 hours ago) and read 1588 times:

A second agency has downgraded Spain's credit rating, citing the countries poor growth prospects. Fitch joins Standard & Poor's in the downgrade to AA+.

This adds to the countries regional banking problem with 6 savings banks seeking alliances to avoid insolvency following on from Cajasur being taken over by Spanish authorities earlier this month.

With an unemployment rate of currently 20% (twice the eurozone average) it isn't looking too good for Spain.

4 replies: All unread, jump to last
 
User currently offlinemarcus From Mexico, joined Apr 2001, 1767 posts, RR: 2
Reply 1, posted (3 years 10 months 4 weeks 12 hours ago) and read 1561 times:

I guess it's time to buy that beach apartment in the "costa" or the studio in MAD then.......


Kids!....we are going to the happiest place on earth...TIJUANA! signed: Krusty the Clown
User currently offlineKlaus From Germany, joined Jul 2001, 21353 posts, RR: 54
Reply 2, posted (3 years 10 months 4 weeks 12 hours ago) and read 1555 times:

If the rating agencies hadn't demonstrated their complete and utter incompetence as a major contributing cause of the financial crisis, this could be called a plausible step.

As things stand, among many other things to be cleaned up, the current rating agencies need to be totally revamped or completely replaced outright. They are in much, much worse shape themselves than either Spain or even Greece.


User currently offlineDocLightning From United States of America, joined Nov 2005, 18713 posts, RR: 58
Reply 3, posted (3 years 10 months 3 weeks 6 days 21 hours ago) and read 1368 times:

This is an interesting test for the Euro. Spain is the 4th largest economy and, until recently, was the fastest growing in Europe.

In most countries, an event like this would drive the value of the currency up a bit. Nobody has any money to spend, so everything gets cheaper. With the Euro, that effect is much smaller. But while the Euro holds steady, other things in Spain get very cheap, like labor and land. A building boom in the costal towns could be the correcting factor, but that alone isn't going to employ 15% of Spaniards so as to get unemployment down to a reasonable level again.

The Euro may not help here.


User currently offlineKlaus From Germany, joined Jul 2001, 21353 posts, RR: 54
Reply 4, posted (3 years 10 months 3 weeks 6 days 21 hours ago) and read 1364 times:

Quoting DocLightning (Reply 4):
In most countries, an event like this would drive the value of the currency up a bit. Nobody has any money to spend, so everything gets cheaper.

How would that produce any upwards momentum? I see only downwards pressure there.


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